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United Kingdom Special Commissioners of Income Tax Decisions
You are here: BAILII >> Databases >> United Kingdom Special Commissioners of Income Tax Decisions >> Sun Life Assurance Company of Canada (UK) Ltd v Revenue & Customs [2007] UKSPC SPC00658 (11/12/2007)
URL: http://www.bailii.org/uk/cases/UKSPC/2007/SPC00658Annex.html
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see: Spc00658 - Annex
Spc00658 - Annex
Illustration of the HMRC and SLOCUK positions, with a comparison to a general Case I trader
- The examples below illustrate the results being argued for by HMRC and SLOCUK
- Under the HMRC position, the sum of the tax liability of the insurer computed separately for each of the three years can be different from the tax the insurer would otherwise have suffered if the identical results were earned in a single-year
- Following SLOCUK's position the tax liability will be the same regardless of the pattern of profits and losses
- The same result as would be obtained for a general trader
Taxed at
Taxed at lower Taxed at full
Individual Periods I-E Case I S/H rate P/H rate full rate rate rate
Year 1 100 60 60 40 60 40 60
Year 2 100 (60) 0 100 0 100 0
Year 3 100 60 60 40 0 100 0
Total 300 60 120 180 60 240 60
Tax at 30%/20% 36 36 72 18 48 66 18
Single year comparison
Cumulative results 300 60 60 240 60 240 60
Tax at 30%/20% 18 48 66 18 48 66 18